February 28, 2018

SMC’s P700-B airport project grounded by the ICCDoubleDragon set to open 2nd ind’l complex in Iloilo

NEWS
DoubleDragon Properties Corporation’s industrial leasing subsidiary of CentralHub Industrial Centers, Inc. has acquired a 3.9-hectare property in Iloilo for development into its next industrial warehouse complex. The lot is strategically located along Iloilo R3 Road approximately 5 km from the Iloilo International Airport and 10 km to the Iloilo City Proper. It is along the national highway en route to the Iloilo International Airport from Iloilo City Proper. “This newly acquired location in Iloilo is the second CentralHub complex in the Philippines following CentralHub-Tarlac which is now under construction,” the firm said. CentralHub-Tarlac sits on a 6.2-hectare lot with a capacity of 32,000 square meters of leasable space once fully developed, while CentralHub-Iloilo will have a capacity of 22,000 square meters of leasable space once fully developed. CentralHub is envisioned to become the leading provider of industrial warehouses in the Philippines through the development of its first eight CentralHub sites by 2020, 2 in North Luzon, 2 in South Luzon, 2 in Visayas and 2 in Mindanao. The first 8 CentralHub sites is targeted to have a total land area of 100 hectares.
(Source: Manila Bulletin, 16 February 2018)

RESEARCH VIEW
Aside from the Cavite- Laguna-Batangas area more companies are developing industrial parks in Pampanga, Tarlac, and Pangasinan in the Northern-Central Luzon corridor due to the attractiveness of the locations to manufacturers of fast-moving consumer goods and developers of warehouses. Meanwhile, the development of an industrial complex in Iloilo indicates the province’s feasibility as an industrial hub in the Visayas group of islands. Colliers International encourages industrial park developers to look at various manufacturing roadmaps being implemented by the government to take advantage of future investment inflows. Developers should thoroughly assess the needs of future industrial locators and align their future projects with the possible locators’ requirements. We see potential in the manufacture of automotive parts, chemical products, and pharmaceuticals as these are among the segments being aggressively promoted by the Department of Trade and Industry (DTI). Developers with existing industrial estates should recalibrate their properties to retain locators and attract new ones especially in view of expanding industrial supply in Northern and Central Luzon and key areas in Visayas and Mindanao.

Cathay Land’s outlet mall set to open in Aug.

NEWS
Cathay Land, Inc., the property developer behind South Forbes, is pouring P2.5 billion in an outlet mall in Silang, Cavite. In a statement, Cathay Land said the company is bullish on the prospects of Acienda Designer Outlet, which is being jointly developed with London-based Freeport Retail. Phase 1 of Acienda is scheduled to open on Aug. 2. Acienda Designer Outlet is located on a 20-hectare property 10 minutes north of the Tagaytay City Rotunda along Km. 48 Aguinaldo Highway in Silang. Cathay Land said construction on the project is in its final stages, with units expected to be turned over to retail partners in March. “With the construction of the Cavite-Laguna Expressway in full blast… our Acienda Designer Outlet will only be 30 minutes away from NAIA (Ninoy Aquino International Airport) and the Entertainment City. Thus, now is the right time to introduce a world-class outlet experience to Manilans and the nearby provinces,” Jeffrey Ng, Cathay Land president, was quoted as saying in the statement. “We expect that phenomenal growth of world-class outlet malls to be duplicated here in the Philippines mainly due to rising incomes locally, remittances from abroad and tourist arrivals that will hit 10 million a year in the next few years,” he added. Chris Milliken, Freeport Retail cofounder and commercial director, noted outlet malls have seen “massive” sales growth worldwide.
(Source: Business World, 12 February 2018)

Colliers believes that strong macroeconomic fundamentals sustain the country’s retail sector and this entices developers to build new malls outside of Metro Manila. While personal consumption grew by a slower 5.8% from 7% last year, we see spending picking up this year due to the implementation of the first package of the Comprehensive Tax Reform program which expands the purchasing power of employees. Coupled with low inflation (3.2% in 2017 and with the government’s 2% to 4% projection this year), higher take-home pay should have a positive effect on Filipinos’ retail spending. Consumption is also buoyed by Overseas Filipino Workers (OFW) remittances, which reached USD28.2 billion from January to November 2017, up 5.1% YoY. We believe that the continued growth in remittances and stable inflation rates will continue to play a crucial role in driving the country’s retail sector.

New local property developer in Gensan enters market

NEWS
THE real estate industry in General Santos City is also starting to kick off with new players coming and currently developing housing projects. One of these is the Jubilance, Inc. which is now on the first phase of development of their Lacewood Subdivision located at Nursery Road, Lagao, General Santos City. They target to complete the first phase by June of this year. The development now already has landfill and drainage system. The project will consist of a 466 units in total – 177 raw socialized housing and 289 economic housing. Jubilance, Inc. president engineer Dante Suico said the first phase is mainly of the construction of the socialized housing which is already sold out. By June 2018, they plan to immediately turn over the finished units to the buyers. Their socialized housing house and lot unit, which has a lot area of about 50 square meters (sqm), cost P450,000 while the economic house and lot units measuring 100 sqm is priced at P1.7 million.
(Source: Sunstar Pampanga, 12 January 2018)

Residential condominium leasing in Metro Manila remains challenging, driven by the influx of new condominium completions both in major business districts and fringe locations. To compensate for the softer outlook in Metro Manila, we expect developers to continuously venture into residential projects in second-tier and third-tier cities all over the country, where demand comes from end-user buyers. The markets may be smaller compared to Manila but more stable in terms of end user housing demand. For instance, local developers in General Santos City have been aggressive in developing socialized and economic housing units that cater to overseas Filipino workers (OFWs) and local employees that are starting to develop their own families. We see more firms pursuing residential projects in the area in light of the national government’s plan to develop Mindanao’s infrastructure backbone.